CVS targets EpiPen with cheaper, generic version
The nation’s largest drug-store chain announced a move Thursday that will cut prices and boost competition on a critical lifesaving medication that has been at the center of the public resentment over skyrocketing drug costs, including fresh attacks by President-elect Donald Trump.
CVS Health Thursday that it would start selling the generic version of a competitor to pharmaceutical giant Mylan's EpiPen, an injection for people having severe allergy reactions. The move comes amid public consternation over multiple price increases that left the brand-name allergic-reaction treatment EpiPen with a list price of more than $600, up from about $100 in 2009.
CVS says the generic based off Impax Laboratories’ Adrenaclick treatment will sell for $109.99 per two-pack before potential discounts, or about one-third the initial $300 list price of the generic version of the EpiPen that Mylan announced after criticism about pricing.
Trump attacked drugmakers on Wednesday for sharp hikes in drug prices. Outrage over steep increases and the corresponding profit boon for drugmakers is one of few bipartisan matters in Washington, although disagreements over how to address the matter have prevented action.
"They're getting away with murder," Trump said Wednesday of drug companies, whose stocks plunged afterward.
The CVS move also comes amid scrutiny over the role of pharmacy benefit managers such as the CVS Caremark unit, in contributing to EpiPen increases. The National Community Pharmacists Association recently called for a Congressional hearing on how pharmacy benefit managers have contributed to the "absurdly high" price.
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In addition, the development heightens tension between pharmacy benefits managers and drug giants, which blame each other in part for sky-high drug prices.
Helena Foulkes, president of CVS Pharmacy, a division of CVS Health, said the company responded after its pharmacists heard a steady stream of concerns from customers over EpiPen’s price increases.
The epinephrine injector treats allergic reactions in potentially life-threatening situations. Adrenaclick, approved by the Food and Drug Administration in 2003, also administers epinephrine but through a slightly different injection.
In a business often shrouded in uncertainty over pricing, the CVS decision to target Mylan reflects an unusually public attack by a pharmacy giant on an individual pharmaceutical company.
But the chain, which operates more than 9,600 pharmacies, may have financial incentives to make a play against EpiPen.
Beyond generating publicity for siding with aggrieved customers, the company's pharmacy benefit managers negotiate pricing with drug companies and may be seeking to tip the balance of power in its favor. CVS Caremark manages prescription drugs through more than 68,000 retail pharmacies, including its own, as well as mail-order operations.
CVS faces "competitive pressures" in the pharmacy benefits management sector that have prompted "a larger portion of rebates and/or discounts," the chain said in a public filing Nov. 8.
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The company recently warned that it would lose more than 40 million retail prescriptions in 2017 for several reasons, including competitor Walgreens' new mail-order pharmacy tie-up with Prime Therapeutics.
“Our focus has always been on finding solutions for patients first and foremost,”Foulkes said. “The best thing that can happen to keep drug prices low is to have a lot of competition in the marketplace.”
Mylan, for its part, has repeatedly argued that most customers don’t pay the full price of EpiPen out of pocket, with many relying on insurance or special manufacturer’s coupons. Still, the company introduced a generic version of its own treatment in December amid swirling scrutiny over profit taking. The company also offers rebates for certain patients and has said that about 85% of EpiPen users pay less than $100 out of pocket.
Foulkes said “in most cases” customers will qualify for a manufacturer’s coupon for $100 off the Adrenaclick treatment, making it $9.99 for them. She said Medicaid and Medicare plan members won’t qualify for the coupon but that CVS pharmacists will work with customers to identify their cheapest route to acquiring the treatment.
“We really think it solves this pain point in a very specific way and brings the cost down dramatically,” she said.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.